Question

Advance Accounting-kindly assist me with the below. Also kindly type out or attach on excel sheet

Pas Corporation acquired 80 % of Sel Corporation's common stock on January 1,2009 for $ 240,000 cash

The stockholders'equity of Sel at this time consisted of $ 150,000 capital stock and $ 50,000 retained earnings

The difference between the price paid by Pas and the underlying equity acquired in Sel was due to a

building overvalued by $10,000 with 20 year useful life, equipment undervalued by $ 20,000 useful life 10 years,

Land undervalued by $ 50,000 and the remainder to unrecorded patent with a 20-year life. Straight line depreciation is used

Required

1) Provide the entries made by Pas on January 1, 2009 and subsequently for the year

     To be done on separate worksheet - investor entries

2) Provide the consolidation entries /elimination entries at December 31, 2009    

  To be done on separate worksheet- elimination entries

Answer 1

Acquisition analysisi
Net asset value
Common stock	150000
Retained earnings	50000
Net asset book value	200000
Fair value in excess of book value
Building	-10000
Equipment	20000
Land	50000
	60000
Net asset fair value	260000
NCI	60000
Parent	240000
Patent	40000
Acquisition entries
Investment in Sel	240000
To cash		240000
Elimination entries
Common stock	150000
Retained earnings	50000
To investment in Sel		160000
To Non-controlling interest		40000
Equipment	20000
Land	50000
Patent	40000
To building		10000
To investment in Sel		80000
To Non-controlling interest		20000
Buildings	500
Depreciation expense	1500
To equipment		2000
Amortisation expense	200
To Patent		200
Investment in Sel	1700
To depreciation expenses		1500
To amortisation expense		200